Congressional Committees Approve Key Trade Bills, Numerous SFIA-Backed Provisions
The Senate Finance and House Ways & Means Committees took important steps towards congressional approval of key SFIA-backed trade bills during the week of April 20. In markups held on April 22 and 23, respectively, the committees approved four bills: (1) trade promotion authority (TPA) legislation needed to conclude major trade agreements; (2) legislation to renew the Generalized System of Preferences (GSP) and trade preference programs for African countries and Haiti; (3) customs reauthorization legislation that could hold the key to moving the miscellaneous tariff bill (MTB) process forward; and (4) trade adjustment assistance (TAA) legislation that may be essential to mustering the political support needed to pass the other three trade bills.
Floor votes on the trade bills could come as early as the week of May 4 in the Senate and the week of May 11 in the House, where the floor vote on TPA is expected to be close. SFIA is actively engaged in urging Members of Congress to move forward on this unique opportunity to advance the U.S. trade agenda.
The most anticipated tests in the Finance and Ways & Means Committee markups concerned the TPA bill (S. 995, H.R. 1890), identical versions of which had been introduced the week before in the Senate by Finance Committee chairman Orrin Hatch (R-UT) and ranking member Ron Wyden (D-OR) and in the House by Ways & Means Committee chairman Paul Ryan (R-WI). However, the bill was approved by strong votes by both Finance (20-6) and Ways & Means (25-13). As reported, TPA is a practical necessity to securing congressional passage of major trade agreements such as the Trans-Pacific Partnership covering the United States and 11 other Asian-Pacific countries.
Efforts in both committees to attach controversial currency manipulation amendments to the TPA bill were derailed, although that issue is expected to resurface in later floor amendments. The Finance Committee did approve, however, a problematic amendment offered by Sen. Robert Menendez (D-NJ) to preclude the use of TPA’s fast-track mechanism for trade agreements with any country listed by the State Department as among the most egregious offenders in failing to take sufficient action to combat human trafficking. Because TPP candidate Malaysia is among the countries currently included on that list, the human trafficking amendment (which was not adopted by the House) would threaten congressional approval of a TPP agreement.
The trade preference bill (S. 1009, H.R. 1891) approved by both committees would, inter alia, extend the GSP program until December 31, 2017, retroactive to the program’s July 31, 2013 expiration (the GSP provides duty-free treatment for beneficiary developing countries for nearly all dutiable categories of sporting goods equipment). The bill also would extend the African Growth & Opportunity Act for 10 years beyond its September 30 expiration date and extend two Haiti-specific preferential programs for an additional five years beyond their current 2020 expiration date. Also of interest to SFIA members, the Finance Committee approved amendments to: eliminate the GSP’s statutory exclusion of textile and leather travel goods (meaning the Administration would entertain petitions to add these products to GSP eligibility); reclassify certain water resistant performance footwear as athletic footwear (thereby lowering the applicable duty from as high as 37.5 percent to 20 percent); and create a new tariff classification for woven recreational performance outerwear (but with no change in duty).
The respective customs reauthorization and trade enforcement bills (S. 1015, H.R. 1907) approved by the two committees contain the greatest amount of divergence from each other and likely will need to go to conference. Significantly for many SFIA members, the amendments adopted by the Finance Committee include the Portman-McCaskill bill (S. 998) to reform the MTB process which has been used in the past to secure duty reductions on golf, and basketball and volleyball equipment (as reported, the reform proposal would establish a revised MTB process that originates with the filing of requests with the U.S. International Trade Commission). More controversial differences exist in the two bills’ trade remedy measures, namely their varying approaches to fighting against evasion of trade remedy duties, and in a currency manipulation amendment adopted by the Finance Committee. Provisions of interest common to both bills would, inter alia:
- Authorize CBP to share un-redacted samples of suspected infringing merchandise with rights holders, and require CBP to do so if the agency determines that examination or testing by the rights holder would assist in determining if the merchandise violates an IP right
- Mandate CBP to work with the private sector to ensure benefits for industry participants of C-TPAT and other partnership programs
- Authorize FY 2016-2018 appropriations to complete the development and implementation of Automated Commercial Environment and require agencies to maintain the IT infrastructure needed to support the International Trade Data System's operation
- Modernize duty drawback
- Raise the administrative exemption from $200 to $800 for shipments of merchandise imported by one person on one day ($800 is the current amount for personal duty free exemption for U.S. residents for articles accompanying them when returning to the U.S.)
- Amend HTS 9801 so as to reduce the record-keeping burden on goods returned to the United States without improvement abroad.